This document outlines the key steps in conducting a market segment analysis. It discusses that market segmentation involves dividing the overall market into smaller subgroups based on characteristics like demographics, interests, or behaviors. The 10 steps outlined are: understanding customers and competition, planning segmentation strategies, implementation, connecting with customers, identifying and profiling segments, forecasting potential, analyzing competitive forces, evaluating profitability, selecting target segments, and developing positioning and marketing mixes. The overall purpose of segmentation is to allow companies to better understand customer needs and tailor their products, services, pricing and promotion accordingly.
2. Market Segmentation
Market segmentation is actually is a process in which
target market divided into smaller approachable
groups
Target market divided into smaller groups on the
basis of
Demographics
Common interest
Behaviors
3. Example
When any company going to launch new product. They
are following setup for market segment analysis
Examine overall market
Who are their target buyers
Break larger market into smaller segments
Specific segment consumer needs
4. Market Segment Analysis
Marketer always uses criteria to market segment
analysis. This process includes following steps
5. Steps
1. Societal market orientation
2. Understanding customers, competition and financial implications
(market segments)
3. Planning
4. Implementing
5. Connecting with customers
6. Identify market segments and develop a profile of each segment
7. Develop a forecast of market potential of each segment
8. Analyze competitive forces in each segment
9. Analyze sales, costs, profitability and return on investment for
each segment
10. Select targeting market segments and develop positioning and
marketing mixes of each groups
6. 1. Societal market orientation
Societal market orientation in which company take
good marketing decision on the basis of
Consumers’ wants
Company requirements
Society long term interest
8. Continue…
Societal market orientation in any organization can be
applied at three levels:
Corporate level
Strategic business unit level
Product market level
9. Example
AVON is multinational beauty and Cosmetics
Company. This company raised funds by sale of pink-
ribbon and their independent sales representatives
have raised millions of dollars for National Breast
cancer foundation.
10. 2. Understanding customers, competition and
financial implication (Market segments)
Understanding customers through following types of
segmentation
On the basis of demographic
On the basis of geographic
On the basis of behavioral
On the basis of psychographic
On the basis of customers journey
11. Understanding customers
Any business can more focus on understanding
customers by
From the size of their purchases
Learn what they like and dislike
Do the detailed feedback from them
12. Understanding competition
Businesses can understand competition through following
Selecting a list of competitors
Technical analysis of competitors
SWOT analysis
Highlight overall competitive analysis
13. 3. Planning
Planning can be at three levels
Corporate-level planning
Strategic-business-unit-level planning
Product-market-level planning
14. Continue…
In planning phase, customers division into groups on
the basis of following aspect:
Psychographic
Decision makers
Behavioral
Geographic
Distribution
Demographic
16. 5. Connecting with customers
Companies connected with customers through
following ways:
By sophisticated data-driven marketing like email
marketing, targeted campaigns.
By personalization targeted offers can truly relevant
to the individual customer.
Through new offers on the basis of past experience of
customers
17. Identify market segments and develop a
profile of each segment
There are three steps to comply with when identifying
marketplace:
Identify why a customer would want to buy product
or service
Segment the overall market
Research the market
18. Continue…
Companies design promotional strategy to target the
specific age group buyers. After that making the
profile of this segment on the basis of geographic
demographic
psychographic
and behaviorist
19. 7. Develop a forecast of market potential of
each segment
Companies use some of the methods for forecasting
Survey and Judgment Forecasting Techniques like
customer survey, sale force composite and expert
opinion
Time Series Forecasting Techniques like market tests
and correlation techniques
20. 8. Analyze competitive forces in each segment
The best way to analyze and understand the
competitive forces comprehend the Porter's five
forces model. These five forces are following:
Competitive rivalry
The bargaining power of suppliers
The bargaining power of customers
The threat of new entrants
The threat of substitute products or services
21. Analyze sales, costs, profitability and return
on investment for each segment
Companies use numerous ways to measure the
organization's profits. They are following:
By seeing margin or profitability ratios
By seeing Break-even analysis
By analyzing Return on assets and on investment
22. Select targeting market segments and develop
positioning and marketing mixes of each groups
Companies thinks about
Ideal product for the target segment
Best ways to get targeted segment attention
Range of prices which customers willing to pay for
the targeted segment
List of places, best way to get the products easily
23. Continue…
Companies choose best positioning strategy from the
following strategies
Unique selling proposition
Value proposition